Wednesday, October 08, 2008

Well, I can't tell you how beautiful it is here. Right now -it's like 5 AM and I'm on haole time so I'm awake and looking for something to do in the dark... I could be going down to the 24 hour Fitness Center - but NAH! I'm going to check in with my peeps, instead.

It is incredibly beautiful here, possums. TheKea Lani is just beautiful and the island weather is so silky and seductive. Just luscious. To tell the truth, I was bitching about having to travel all the way to Maui for this wedding - but hey, now I can kind of see why the happy couple decided to take the plunge here on the Islands. It's THEIR big day, after all. And of course, now I'm wishing that we were staying for a week instead of just 4 days.

But even here, the rudeness of today's economic situation intrudes. We enjoyed happy hour with our new friend, Tom, the bartender and fount of local knowledge of lore. He's also the master of the snappy one-liner, e.g. Q: "Do you know whatWailea means?" A: "Rich, white man." Well, Wailea might mean rich white man, but Tom wasn't laughing at the fact that we were the only 'rich white men' at the bar. He said the hotel had just been dead - they're occupancy rate is at between 40-45% and their sister property on the other side of the island is even worse with rates hovering around 20-25%. The kicker: When we asked him what the outlook was - he didn't seem too worried. The hotel owner has deep pockets, he said. "Being from Dubai and all." (Fact check, Tom:He's from Saudi Arabia and his name is Prince Alwaleed bin Talal.)

Well, daylight is breaking now, kiddos. The birds are chirping and I think it's time to go for a walk on the beach. Aloha for now and as they say on the islands, 'a hui hou' - until we meet again.

D.

P.S. I told you the situation in Iceland was grim. But going to Russians as the lender as last resort? Will the economic situation start cracking the geopolitical scene like an egg?

Near-bankrupt Iceland's €4bn ($5.43bn) loan from Russia is still not a done deal. Iceland's central bank Governor David Oddsson says that talks are still "ongoing" but that any aid from Russia would be "very much welcomed." You can understand why Iceland is desperate for a massive euro-injection in the current bank crisis: the Sedlabanki, the central bank in Reykjavik, urgently needs euros because it has only €4.5bn in its current reserves and the country’s banking system needs to refinance about €10bn before year end -- not easy when the Icelandic krona has fallen 40 per cent against the Euro currency so far this year.

But what price will the Russians demand for their bailout? A highly-placed source in Reykjavik tells Coffee House that Iceland might look kindly on requests from Russia's military to use America's former military base in Iceland. America closed its Naval Air Station at Keflavik Airport two years ago, handing back the Nato facility to the Icelandic government.

Now the word in Reykjavik is that the Russians could have use of it in return for the loan. Not that Keflavik would become a Russian air base -- Iceland is a member of Nato, so that is out of the question -- but it would suit the Kremlin to be able to use it for, say, refuelling and maintenance. Having use of such a facility only a few hours flying time from North America would be a major Russian propaganda coup and cause consternation in Washington.

Iceland is in two minds. It wants to remain a loyal Nato member. But it is also in financially desperate straits and there is some resentment about the abrupt manner in which the Americans left, leaving the massive facility to deteriorate. So Iceland might look more kindly on any Russian request than the rest of Nato thinks.

UPDATE: Sources in Reykjavik, who've now read our story, tell Coffee House that Iceland turned to Russia for a loan after the EU, the Scandinavian countries and the US Federal Reserve turned it down.